PETRONET LNG LIMITED
CODE FOR PREVENTION OF INSIDER TRADING
IN THE SECURITIES OF PETRONET LNG LIMITED
(PLL)
Code for prevention of Insider Trading in the Securities of Petronet LNG Limited (PLL)
1. BACKGROUND
In line with SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended, the Board of
Petronet LNG Limited (PLL) at its meeting held on 28.05.2004 had approved the “Code of Internal
Procedures and Conduct for Prevention of Insider Trading in dealing with the securities of PLL” which
became effective from 01.06.2004.
SEBI vide notification dated 15.01.2015 repealed the SEBI (Prohibition of Insider Trading)
Regulations, 1992 and replaced the same with SEBI (Prohibition of Insider Trading) Regulations, 2015
to put in place a framework for prohibition of Insider Trading in securities and to strengthen the legal
framework thereof. Accordingly, the Board of PLL at its meeting held on 30.07.2015 had approved
and adopted ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive
Information’ and ‘Code of Conduct to Regulate, Monitor and Report trading by Insiders of the
securities of PLL’ , which became effective from 15.05.2015.
Thereafter, SEBI vide notification dated 31.12.2018 notified SEBI (Prohibition of Insider Trading)
(Amendment) Regulations, 2018 which amended the SEBI (Prohibition of Insider Trading)
Regulations 2015 and would become effective from 01.04.2019.
Accordingly, the new code ‘Code for Prevention of Insider Trading in the Securities of Petronet
LNG Limited (PLL)’ in line with SEBI (Prohibition of Insider Trading) (Amendment) Regulations,
2018 shall become effective from 01.04.2019 as approved by the Board.
2. OBJECTIVE OF THE CODE
2.1. The Code aims to ensure confidentiality of Unpublished Price Sensitive Information (UPSI) and
prevent misuse of such information. The Code encourages timely reporting and adequate disclosure of
price sensitive information by the Promoter(s), Director(s), Key Managerial Personnel, certain
specified employees and other Connected Person. Further, the Code also endeavors to put in place an
adequate and effective system of internal controls to ensure compliance with the requirements given in
SEBI (Prohibition of Insider Trading) Regulations 2015 to prevent insider trading.
3. CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UPSI
3.1. To ensure fair disclosure of events and occurrences that could impact price discovery for securities
issued by PLL in the market, the Promoter(s), Director(s), Key Managerial Personnel and certain
specified employees of PLL shall abide by the principles stated in the “Code of practices and
procedure for fair disclosure of unpublished price sensitive information” provided at Appendix - I.
4. POLICY FOR DETERMINATION OF LEGITIMATE PURPOSES
4.1. To maintain confidentiality of UPSI shared by Insiders in the ordinary course of business, a policy for
determination of “legitimate purposes” for sharing such UPSI with outsiders is provided at Appendix -
II.
5. DEFINITIONS
5.1. “Company” / “PLL” means Petronet LNG Limited.
5.2. "Connected Person" means,
5.2.1 Designated Person;
5.2.2 Any person who is or has during the six months prior to the concerned act been associated with PLL,
directly or indirectly, in any capacity including by reason of frequent communication with its officers
or by being in any contractual, fiduciary relationship or holds any position including a professional or
business relationship between himself and PLL, whether temporary or permanent, that allows such
person, directly or indirectly, access to UPSI or is reasonably expected to allow such access;
5.2.3 Without prejudice to the generality of the foregoing, the persons falling within the following categories
shall be deemed to be connected persons unless the contrary is established:
5.2.4 Immediate relative of connected person mentioned at (ii) above;
5.2.5 an associate company or subsidiary company of PLL;
5.2.6 an intermediary as specified in section 12 of the Act or an employee or director thereof; or
5.2.7 an investment company, trustee company, asset management company or an employee or director
thereof; or
5.2.8 an official of a stock exchange or of clearing house or corporation; or
5.2.9 a member of board of trustees of a mutual fund or a member of the board of directors of the asset
management company of a mutual fund or is an employee thereof; or
5.2.10 a member of the board of directors or an employee, of a public financial institution as defined in
section 2 (72) of the Companies Act, 2013; or
5.2.11 an official or an employee of a self-regulatory organization recognized or authorized by the Board; or
5.2.12 a banker of the company; or
5.2.13 a concern, firm, trust, Hindu undivided family, company or association of persons wherein a director of
a company or his immediate relative or banker of the company, has more than ten per cent. of the
holding or interest;
5.3 "Designated Employee” shall mean –
(i) Key Managerial Personnel;
(ii) All executives of PLL in Senior Management;
(iii) All employees of the Secretariats of the Functional Directors of PLL;
(iv) All employees of the Secretarial Department;
(v) All employees of the Finance & Account and IT Department of the Company;
(vi) All officers of Corporate Internal Audit, Marketing, Corporate Strategy and Corporate Communications;
(vii) Any other employee of PLL to be notified by the Compliance Officer, from time to time, with the approval of
the MD & CEO of PLL;
5.4 "Designated Person” shall mean –
(i) Promoter(s);
(ii) Director(s);
(iii) Chief of Corporate Ethics
(iv) Designated Employees;
(v) Designated Employees of material subsidiaries of PLL.
Explanation: For the purpose of clause (v) above, “material subsidiary” shall mean a subsidiary,
whose income or net worth exceeds ten percent of the consolidated income or net worth respectively,
of PLL and its subsidiaries in the immediately preceding accounting year.
5.5 "Directors" means Directors on the Board of PLL including Independent Directors, Promoter’s Nominee
Director and other Nominee Director.
5.6 “Generally Available Information” means information that is accessible to the public on a non-
discriminatory basis.
5.7 “Immediate Relative" means a spouse of a person and includes parent, sibling and child of such person
or of the spouse, any of whom is either dependent financially on such person or consults such person in
taking decisions relating to trading in securities.
5.8 “Insider" means any person who is:
(i) a connected person; or
(ii) in possession of or having access to UPSI;
5.9 “Key Managerial Personnel” means –
i. the Chief Executive Officer or the Managing Director or the Manager;
ii. the Whole-Time Director;
iii. the Chief Financial Officer;
iv. the Company Secretary;
5.10 “Promoter” shall have the meaning as defined under Articles of Association of the Company as
amended from time to time.
“Promoter Group” shall have the meaning assigned to it under the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 or any modification
thereof;
5.11 "Securities" means the securities issued by PLL from time to time such as Equity Shares and Debentures,
which are listed or proposed to be listed on a Stock Exchange and derivatives thereof.
5.12 "Trading" means and includes subscribing, buying, selling, dealing, or agreeing to subscribe, buy, sell,
deal in any securities, and "trade" shall be construed accordingly.
5.13 “Trading day” means a day on which the recognized stock exchanges are open for trading.
5.14 “Trading Window” means a trading period in which PLL securities can be traded.
5.15 "Unpublished price sensitive information” (UPSI) means any information, relating to PLL or its
securities, directly or indirectly, that is not generally available which upon becoming generally available,
is likely to materially affect the price of the securities and shall, ordinarily include but not restricted to,
information relating to the following:
5.15.1 financial results;
5.15.2 dividends;
5.15.3 change in capital structure;
5.15.4 mergers, de-mergers, acquisitions, delisting, disposals and expansion of business and such other
transactions;
5.15.5 Changes in Key Managerial Personnel.
6 APPLICABILITY
6.2.1 This code shall be applicable and binding on the Insiders and their immediate relative as defined
above.
7 COMPLIANCE OFFICER
7.2.1 The Company Secretary of PLL shall act as the Compliance Officer for the purpose of this Code and
in the absence of the Company Secretary, or such other officer of PLL as authorized by MD & CEO in
this regard.
8 RESTRICTIONS ON COMMUNICATION / SHARING OF UPSI AND TRADING BY INSIDERS
Communication or procurement of UPSI:
(i) All information shall be handled within the organisation on a need-to-know basis and no
UPSI shall be communicated to any person except in furtherance of the Insider’s
legitimate purposes, performance of duties or discharge of his legal obligations.
(ii) No person shall procure from or cause the communication by any Insider of UPSI,
relating to PLL or securities listed or proposed to be listed, except in furtherance of
legitimate purposes, performance of duties or discharge of legal obligations.
Explanation: “Legitimate Purposes” shall mean sharing of the UPSI by an Insider with
outside agencies / parties in the ordinary course of business for carrying out his duties.
Please refer to policy for determination of “legitimate purposes” as provided at
Appendix-II.
(iii) The Compliance Officer shall maintain a structured digital database containing the name
of persons or entities, as the case may be, with whom information is shared under this
Code along with the Permanent Account Number (PAN) or any other identifier authorised
by law, where PAN is not available.
(iv) All Designated Persons need to ensure that details of the entities with whom UPSI is
shared, is submitted to the Compliance Officer within 2 days to enable maintenance of
the structured database.
Trading when in possession of UPSI:
(i) No Insider or their immediate relative shall either on their behalf or on behalf of any other
person, trade in securities of PLL when in possession of any UPSI.
(ii) When an Insider or their immediate relative trades in securities while in possession of
UPSI, their trades would be presumed to have been motivated by the knowledge and
awareness of such information in his possession.
(iii) The onus of establishing that the Insider or their immediate relative was not in possession
UPSI shall be on them.
9 TRADING WINDOW
Unless otherwise specified by the Compliance Officer, the Trading Window shall remain closed
for the following events, atleast 7 days prior and 48 hours after the information is generally
available except in respect of Sr. No. (i) as mentioned below for which the Trading Window shall
remain close from the end of every quarter till 48 hours after the declaration of financial results:
i) Declaration of quarterly and annual financial results;
ii) Declaration of dividend;
iii) Change in capital structure e.g. further issue of securities by way of public / rights
/bonus, buyback of securities, etc.
iv) Mergers, de-mergers, acquisitions, delistings, disposals and expansion of business and
such other transactions
No Insider shall deal in any transaction involving the purchase or sale of the PLL’s securities, either
in their own name or in the name of their immediate relative, during the Trading Window Closure
period as mentioned above.
The remaining days of a year other than the days mentioned under clause 9.1 above shall be
called “Valid Trading Window”.
All Insiders or their immediate relative shall conduct their dealings in the securities of PLL only in
the “Valid Trading Window” period and shall not enter into “Contra Trade” i.e. opposite or reverse
transactions, in the securities of PLL during the next six months following the prior transaction.
If a contra trade is executed, inadvertently or otherwise, in violation of such a restriction, the profits
from such trade shall be liable to be disgorged for remittance to credit to the Investor Protection
and Education Fund administered by the SEBI. However, this restriction is not applicable for trades
carried out in accordance with an approved trading plan.
The Compliance Officer can grant relaxation from strict application of such restriction for reasons
to be recorded in writing provided that such relaxation does not violate the provisions of this code.
The Compliance Officer shall maintain a register of the periods of “Closed Trading Window”,
wherein he shall record the date of closure and opening of the trading window and the purpose for
which trading window is closed as per prescribed format (Appendix- III).
10 TRADING PLANS
An Insider shall be entitled to formulate a Trading Plan and present it to the Compliance Officer
for approval and public disclosure, pursuant to which trades may be carried out on his behalf in
accordance with such plan as per prescribed format (Appendix – IV).
Such Trading Plan shall:
(i) not entail commencement of trading on behalf of the Insider earlier than six months from
the public disclosure of the plan;
(ii) not entail trading for the period between the twentieth trading day prior to the last day of
any financial period for which results are required to be announced by PLL and the second
trading day after the disclosure of such financial results;
(iii) entail trading for a period of not less than twelve months;
(iv) not entail overlap of any period for which another Trading Plan is already in existence;
(v) set out either the value of trades to be effected or the number of securities to be traded
along with the nature of the trade and the intervals at, or dates on which such trades shall
be effected; and
(vi) not entail trading in securities for market abuse.
The compliance officer shall review the Trading Plan to assess whether the plan would have any
potential for violation of these regulations and shall be entitled to seek such express undertakings
as may be necessary to enable such assessment and to approve and monitor the implementation of
the plan.
The Trading Plan once approved shall be irrevocable and the Insider shall mandatorily have to
implement the plan, without being entitled to either deviate from it or to execute any trade in the
securities outside the scope of the Trading Plan.
Provided that the implementation of the trading plan shall not be commenced if any unpublished
price sensitive information in possession of the Insider at the time of formulation of the plan has
not become generally available at the time of the commencement of implementation. In such event
the compliance officer shall confirm that the commencement ought to be deferred until such UPSI
becomes generally available information so as to avoid violation of clause 8.2 above.
Upon approval of the Trading Plan, the compliance officer shall notify the plan to the stock
exchanges on which the securities are listed.
11 PRE-CLEARANCE OF TRADES
A Designated Person or their immediate relative, who intends to trade in the securities of PLL above
the minimum threshold limit of a traded value in excess of Rs. 10 Lakhs, either in a single
transaction or multiple transactions within a period of seven days shall obtain pre-clearance of the
transaction as per the pre-clearance procedure as described hereunder.
Application for pre-clearance shall be made only during Valid Trading Window period. Application
submitted during Trading Window Closure period shall be invalid.
No Designated Person or their immediate relative shall apply for pre-clearance of any proposed
trade if they are in possession of UPSI even during Valid Trading Window period.
A Designated Person or their immediate relative shall make a pre-clearance application to the
Compliance Officer in the prescribed format (Appendix – V) alongwith an undertaking stating that
they have not contravened the provision of Insider Trading Code.
Immediately on receipt of the pre-clearance application, the date and time of the receipt of the same
shall be recorded thereon. The Compliance Officer shall process the preclearance applications and
if the pre-clearance application is in accordance and in compliance with the provisions of this Code,
the Compliance Officer shall endeavor to communicate the pre-clearance immediately to the
applicant but not later than 48 hours from the time of receiving the application. In the absence of
the Compliance Officer, the officer authorized by the Compliance Officer shall give the pre-
clearance.
The Compliance Officer shall maintain a Register of pre-clearance for trading in securities of PLL
as per prescribed format (Appendix – VI).
The Designated Person or their immediate relative shall execute their order in respect of securities
of the PLL within seven trading days from the date of approval of preclearance and details of such
transaction shall be disclosed to the Compliance Officer within 2 days from the completion of such
transaction.
If the order is not executed within said period, the Insider shall obtain fresh pre-clearance.
The pre-clearance of trades shall not be required for a trade executed as per an approved trading
plan.
12 DISCLOSURES
12.2 Designated Person would be required to make disclosures to the Compliance Officer as per details
given below:
12.3 Initial Disclosure
By Whom
What to be disclosed
When to be
disclosed
Form
Promoter / Director
/ KMP
Holding of securities of PLL
as on date of appointment as
Director / KMP or becoming
Promoter
Within seven days
of such
appointment or
becoming Promoter
As per format
provided at
Appendix - VII
Designated Person
1. Disclose name & PAN (or
any other identifier authorized
Within 30 days of
As per format
provided at
by law) of the following
persons:
a) Immediate Relatives
b) Persons with whom the
designated person shares a
material financial
relationship
c) Phone, mobile & cell
numbers which are used
by the above persons
2. Names of educational
institutions from which the
designated person has
graduated
3. Names of past employers
Explanation – The term
“material financial
relationship” shall mean
a relationship in which one
person is a recipient of any
kind of payment such as by
way of a loan or gift during the
immediately preceding twelve
months, equivalent to at least
25% of such payer’s annual
income but shall exclude
relationships in which the
payment is based on arm’s
length transactions.
becoming a
Designated
Person
Appendix - VIII
12.4 Continual Disclosure
By Whom
When to be disclosed
Form
Designated
Person
Within two trading days of such
transaction if the value of the
securities traded, whether in one
transaction or a series of
transactions over any calendar
quarter, aggregates to a traded
value in excess of Rs. 10 Lakh or
such other value as may be
specified.
Explanation - disclosure of
incremental transactions shall be
made when transactions effected
after the prior disclosure cross the
threshold specified above.
As per
format
provided at
Appendix -
X
PLL to the
Stock
Exchange(s)
where securities
are
listed
Within two trading days of receipt
of disclosure or becoming aware
of such disclosure
Designated
Person
1. Within 30 days of the end of the
financial year.
2. Whenever there is a change in
the information vis-à-vis their
last disclosure, within 30 days
from such change.
3.Annual statement of all holdings
in securities of the Company as
at 31
st
March within 30 days of
the end of the financial year
As per format
provided at
Appendix -
IX
12.5 Disclosure by other connected person
PLL may at its discretion require any other connected person or class of connected person to make
disclosures of holdings and trading in securities of PLL in prescribed format (Appendix - XI) at
such frequency as may be determined by PLL in order to monitor compliance with this Code.
13 WHISTLE BLOWER POLICY/VIGIL MECHANISM
13.2 Any PLL employee may report any instances of leak of UPSI as per the process mentioned in the Whistle
Blower Policy / Vigil Mechanism of the Company. The Whistle Blower Policy / Vigil Mechanism is
hosted on the website of the company www.petronetlng.com.
14 DUTIES OF COMPLIANCE OFFICER
14.2 The Compliance Officer inter-alia shall be responsible for:
(i) Compliance of policies, procedures, maintenance of records under this code and monitoring
adherence to the rules for the preservation of UPSI, monitoring of trades and the
implementation of the codes specified in these regulations under the overall supervision of
the Board of Directors of PLL.
(ii) Putting up a report to the Audit Committee, on the following matters, at the end of the
financial year:
- Window Closure Period;
- Trading Plan;
- Pre-clearances application;
- Disclosure to Stock Exchange under this code;
(iii) Maintenance of records of disclosures made under this Code for a period of 5 years.
15 PENALTY FOR CONTRAVENTION OF INSIDER TRADING CODE
15.2 Any Designated Employee or their immediate relative who trades in securities of PLL or
communicates any UPSI in contravention of this Code may be penalized and appropriate
disciplinary action would be taken by the Competent Authority against such employee as provided
in PLL Code of Conduct for employees.
15.3 In case trading in securities or communication of UPSI is done in contravention of this Code by an
Insider, other than a Designated Employee, then the Compliance Officer may report such case to
the SEBI for taking appropriate action. The reporting to SEBI would be in addition to the action
envisaged as per the terms of the contract / agreement for the Breach of contract / agreement.
15.4 In case an Insider or their immediate relative executes a contra trade, inadvertently or otherwise,
in violation of the restriction mentioned in clause 9.4 of the Insider Trading Code, the profits from
such trade shall be liable to be disgorged and transferred to the Investors Education and Protection
Fund of SEBI.
16 POWER OF SECURITIES AND EXCHANGE BAORD OF INDIA
The action by PLL shall not preclude SEBI and other authorities from taking any action in case of
violation of SEBI (Prohibition of Insider Trading) Regulations, 2015, including any amendment
thereof.
17 INFORMATION TO SEBI IN CASE OF VIOLATION OF SEBI (PROHIBITION OF INSIDER
TRADING) REGULATIONS, 2015
Any violation of SEBI (Prohibition of Insider Trading) Regulations, 2015, may be reported by the
Compliance Officer to SEBI and report thereof shall be put up to the Audit Committee.
18 AMENDMENT TO THE CODE
Any amendments in the Code, consequent upon amendment to the SEBI (Prohibition of Insider
Trading) Regulations, 2015, shall be done with the approval of the Board of Directors of PLL.
However, Compliance Officer is authorized to make changes, if any, in the format of disclosure
forms as may be notified by SEBI form time to time.
19 DETAILS OF THE COMPLIANCE OFFICER
Any clarification with regard to the Code may be addressed to the Compliance Officer at the address
given below:
Company Secretary
Petronet LNG Limited
World Trade Centre, Babar Road, Barakhamba Lane,
New Delhi - 110001
Email – investors@petronetlng.com
20 DISCLAIMER
The Insider Trading Code enumerated above is a framework for prohibition of Insider Trading in
Securities of PLL. However, it is the responsibility of every Insider to familiarize and ensure
compliance with this Code, SEBI (Prohibition of Insider Trading) Regulations or any amendment
thereof and other applicable laws.